By Matt Johnson –
After rescinding the June 2022 guidance regarding Fintiv, the PTAB issued updates to how they will consider discretionary denial issues under Section 314(a) on Monday. The updated guidance states:
On February 28, 2025, the USPTO rescinded the June 21 , 2022 memorandum entitled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation” (“Interim Procedure”). The Interim Procedure was intended to provide guidance while the USPTO explored potential rulemaking, but the USPTO did not subsequently propose a final rule addressing the Director’s and, by delegation, the Patent Trial and Appeal Board’s (“Board”) exercise of discretionary institution in an inter partes review (“IPR”) or a post-grant review (“PGR”) in view of a parallel litigation. In the absence of rulemaking, the USPTO rescinded the Interim Procedure to restore policy in this area to the guidance in place before the Interim Procedure, including the Board’s precedential decisions in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (“Fintiv“) and Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020) (“Sotera“). This memorandum sets forth additional guidance.
First, the Interim Procedure’s recission applies to any case in which the Board has not issued an institution decision, or where a request for rehearing or Director Review of an institution decision was filed and remains pending. The Board will consider timely requests for additional briefing on the application of the
Interim Procedure’s recission on a case-by-case basis. Absent extraordinary circumstances, the Board will not revisit a decision on institution if the time for seeking Director Review or rehearing has passed.
Second, the Board will apply the Fintiv factors when there is a parallelm proceeding at the International Trade Commission (“ITC”). As the Fintiv decision explains, although an ITC final invalidity determination does not have preclusive effect, it is difficult as a practical matter to assert patent claims that the ITC has
determined are invalid. See Fintiv, Paper 11 at 8-9. Additionally, instituting an IPR or a PGR where the ITC has set a target date for completing its investigation (i.e., the full Commission’s final determination) to occur earlier than the Board’s deadline to issue a final written decision in a challenge involving the same patent claims means that multiple tribunals may be adjudicating validity at the same time, which may increase duplication and expenses for the parties and the tribunals. Thus, the Board is more likely to deny institution where the ITC’s projected final determination date is earlier than the Board’s deadline to issue a final written decision, and the Board is less likely to deny institution under Fintiv where the ITC projected final determination date is after the Board’s deadline to issue a final written decision.
Third, a timely-filed Sotera stipulation 1 (i.e., a stipulation from a petitioner that, if an IPR or PGR is instituted, the petitioner will not pursue in district court (or in the ITC) any ground raised or that could have been reasonably raised in the IPR/PGR) is highly relevant, but will not be dispositive by itself. Instead, the
Board will consider such a stipulation as part of its holistic analysis under Fintiv.
Fourth, in applying Fintiv, the Board may consider any evidence that the parties make of record that bears on the proximity of the district court’s trial date or the ITC’s final determination target date, including median time-to-trial statistics for civil actions in the district court in which the parallel litigation resides.
Fifth, as stated in Fintiv, the factors considered in the exercise of discretion are part of a balanced assessment of all the relevant circumstances in the case, including the strength of the merits. However, compelling merits alone is not dispositive in making the assessment.
We will continue to monitor and report on developments.
Matthew Johnson
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